Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


(X)   QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1999

                                       OR

(   )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE  SECURITIES
       EXCHANGE ACT OF 1934

For the transition period from ________________to _________________

For Quarter Ended March 31, 1999


                              TRANSNET CORPORATION
             (Exact name of registrant as specified in its charter)

        DELAWARE                                       22-1892295
        --------                                       ----------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

45 Columbia Road, Somerville, New Jersey               08876-3576
----------------------------------------               ----------
(Address of principal executive offices)                (Zip Code)

Registrant's Telephone Number, including area code:   908-253-0500

----------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last Report

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes   X             No _____

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of May 3, 1999: 5,115,804


<PAGE>



                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS


                                                                     Page No.


PART I.  FINANCIAL INFORMATION

   Consolidated Balance Sheets as of March 31, 1999 and June 30, 1998   1

   Consolidated Statements of Operations for the Three and Nine
   Months Ended March 31, 1999 and 1998                                 2

   Consolidated Statements of Cash Flows for the Nine Months Ended
   March 31, 1999 and 1998                                              3

   Notes to Consolidated Financial Statements                           4

   Management's Discussion and Analysis                                 5

PART II.  OTHER INFORMATION                                             8


<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
------------------------------------------------------------------------------



                                                      March 31,     June 30,
                                                       1 9 9 9       1 9 9 8
Assets:
Current Assets:
  Cash and Cash Equivalents                          $6,274,454   $ 5,378,846
  Accounts Receivable - Net                           7,570,407     6,327,434
  Inventories                                           447,023     1,407,682
  Mortgage Receivable                                   253,637       464,423
  Other Current Assets                                   69,701       136,621
  Deferred Tax Asset                                    177,200       177,200
                                                     ----------   -----------

  Total Current Assets                               14,792,422    13,892,206

Property and Equipment - Net                            526,395       613,704

Other Assets                                            842,938       890,608
                                                     ----------   -----------

  Total Assets                                       $16,161,755  $15,396,518
                                                     ===========  ===========

Liabilities and Stockholders' Equity:
Current Liabilities:
  Accounts Payable                                   $  566,816   $   598,008
  Accrued Expenses                                      457,083       614,875
  Accrued Payroll                                       187,254       234,722
  Floor Plan Payable                                    872,578       776,901
  Deferred Income                                            --       100,649
  Income Taxes Payable                                  577,874       210,200
  Other Current Liabilities                              61,021       156,653
                                                     ----------   -----------

  Total Current Liabilities                           2,722,626     2,692,008
                                                     ----------   -----------

Deferred Tax Liability                                   80,700        80,700
                                                     ----------   -----------

Stockholders' Equity:
  Capital Stock - Common $.01 Par Value,
   Authorized 15,000,000 Shares; Issued 7,469,524
   Shares  (of which 2,328,720 are in Treasury)          74,695        74,695

  Paid-in Capital                                    10,686,745    10,686,745

  Retained Earnings                                   8,968,195     8,080,013
                                                     ----------   -----------

  Totals                                             19,729,635    18,841,453
  Less:  Treasury Stock - At Cost                    (6,371,206)   (6,217,643)
                                                     ----------   -----------

  Total Stockholders' Equity                         13,358,429    12,623,810
                                                     ----------   -----------

  Total Liabilities and Stockholders' Equity         $16,161,755  $15,396,518
                                                     ===========  ===========

See Notes to Consolidated Financial Statements

                                         1

<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
------------------------------------------------------------------------------



                              Three Months Ended            Nine Months Ended
                                    March 31,                   March 31,
                              1 9 9 9        1 9 9 8       1 9 9 9      1 9 9 8
                              -------        -------       -------      -------

Revenue                     $10,386,479   $17,564,437   $34,281,057  $57,360,566

Cost of Revenue               8,337,746    15,678,214   27,887,020    51,268,395
                            -----------   -----------   ----------   -----------

  Gross Profit                2,048,733     1,886,223    6,394,037     6,092,171
                            -----------   -----------   ----------   -----------

Expenses:
  Selling, General and
   Administrative Expenses    1,694,153     1,724,406    5,290,704     5,394,782
  Bad Debt Expense                7,500        10,000       22,500        27,500
                            -----------   -----------   ----------   -----------

  Total Expenses              1,701,653     1,734,406    5,313,204     5,422,282
                            -----------   -----------   ----------   -----------

  Operating Income              347,080       151,817    1,080,833       669,889
                            -----------   -----------   ----------   -----------

Other Income (Expense):
  Interest Income                80,571        35,892      239,928       105,890
  Other Expenses                     --       (80,708)          --       466,489
                            -----------   -----------   ----------   -----------

  Total Other Income
   (Expense) - Net               80,571       (44,816)     239,928       491,671
                            -----------   -----------   ----------   -----------

  Income Before Provision
   for Income Taxes             427,651       107,001    1,320,761     1,161,560

Provision for Income Tax        139,581        25,000      432,579       290,000
                            -----------   -----------   ----------   -----------

  Net Income                $   288,070   $    82,002   $  888,182   $   871,560
                            ===========   ===========   ==========   ===========

  Earnings Per Common Share $      0.06   $      0.02   $     0.17   $      0.17
                            ===========   ===========   ==========   ===========


See Notes to Consolidated Financial Statements.

                                         2

<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
CONSOLIDATED CASH FLOWS
(UNAUDITED)
------------------------------------------------------------------------------


                                                           Nine Months Ended
                                                               March 31,
                                                          1 9 9 9      1 9 9 8
                                                          -------      -------

Operating Activities:
  Net Income                                           $  888,182   $   871,560
                                                       ----------   -----------
  Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
   Depreciation and Amortization                          225,150       232,740
   (Gain) Loss On Sale                                      2,921      (466,489)
   Provision For Doubtful Accounts                         22,500        27,500

  Changes in Assets and Liabilities:
   (Increase) Decrease in:
     Accounts Receivable                               (1,265,473)     (209,997)
     Inventory                                            960,659       226,995
     Other Current Assets                                  66,920        85,086
     Other Assets                                          13,677        (1,610)
     Deferred Income Taxes                                     --       240,000

   Increase (Decrease) in:
     Accounts Payable and Accrued Expenses               (236,452)    3,932,436
     Deferred Income                                     (100,649)      153,499
     Other Current Liabilities                            (95,632)        4,134
     Income Taxes Payable                                 367,674            --
                                                       ----------   -----------

   Total Adjustments                                      (38,705)    4,224,294
                                                       ----------   -----------

  Net Cash - Operating Activities                         849,477     5,095,854
                                                       ----------   -----------

Investing Activities:
  Mortgage Receivable Related Party                       210,786       150,000
  Capital Expenditures                                   (106,769)           --
                                                       ----------   -----------

  Net Cash - Investing Activities                         104,017       150,000
                                                       ----------   -----------

Financing Activities:
  Floor Plan Payable                                       95,677    (3,366,167)
  Purchase of Treasury Stock                             (153,563)           --
                                                       ----------   -----------

  Net Cash - Financing Activities                         (57,886)   (3,366,167)
                                                       ----------   -----------

  Net Increase in Cash and Cash Equivalents               895,608     1,879,687

Cash and Cash Equivalents - Beginning of Periods        5,378,846     3,336,917
                                                       ----------   -----------

  Cash and Cash Equivalents - End of Periods           $6,274,454   $ 5,216,604
                                                       ==========   ===========

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the periods:
   Income Taxes                                        $   96,655   $    34,072


See Notes to Consolidated Financial Statements.

                                         3

<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
------------------------------------------------------------------------------


[1]  Summary of Significant Accounting Policies

[A] Consolidation - The consolidated  financial  statements include the accounts
of  the  Corporation  and  its   wholly-owned   subsidiary,   Century   American
Corporation.  Intercompany  transactions  and accounts  have been  eliminated in
consolidation.

[B]  Inventory  -  Inventory  consists  of  finished  goods.  The  Corporation's
inventory is valued at the lower of cost  (determined on the average cost basis)
or market.

[C] Cash and Cash Equivalents - For the purposes of the statement of cash flows,
the  Corporation  considers  highly liquid debt  instruments,  purchased  with a
maturity of three months or less, to be cash equivalents.

[D]  Earnings  Per Share -  Earnings  per  common  share are based on  5,215,200
weighted  shares  outstanding for the period ended March 31, 1999, and 5,216,804
weighted shares outstanding for the period ended March 31, 1998.

[2] Income Taxes

The  Corporation  has a  deferred  tax  asset of  $177,200  and a  deferred  tax
liability of $80,700 based upon temporary timing differences including inventory
capitalization,  allowance  for  doubtful  accounts,  vacation  pay accruals and
depreciation.

[3] Reclassification

Certain items from the prior year's financial  statements have been reclassified
to conform to the current year's presentation.

In the opinion of management,  the accompanying unaudited consolidated financial
statements   contain  all  adjustments   consisting  only  of  normal  recurring
adjustments  necessary to present fairly the financial position,  the results of
operations and cash flows for the periods presented.

These  statements  should be read in conjunction with the summary of significant
accounting  policies and notes contained in the  Corporation's  annual report on
Form 10-K for the year ended June 30, 1998.

[4] Related Transaction

In November 1997, the  Corporation  executed an agreement to sell  approximately
6.32 acres of unimproved  real property in  Mountainside,  New Jersey (the "Real
Property") to W Realty LLC ("W Realty") for the appraised value of $1,000,000. W
Realty is a  partnership,  which at the time of sale  consisted of John J. Wilk,
Chairman of the Board, and Raymond J. Rekuc, a Director of the Corporation.  The
purchase price was payable  through a credit  extended by W Realty as sub-lessor
to the  Corporation  as  sub-lessee  for the  $410,000  of rent  payable  by the
Corporation  over the last two years of its sublease for its principal  facility
in Somerville,  New Jersey and a $590,000  promissory  note executed by W Realty
payable in  installments  of $150,000 in February  1998 and $440,000 in November
1998.  The note was at an  interest  rate of 8% per annum and was  secured  by a
mortgage on the Real  Property.  The $150,000  payment due in February  1998 was
paid and  $190,000 of the  $440,000  payment due in November  1998 was paid with
interest  through January 1999.  Payment of the remaining  $250,000  balance was
renegotiated  under a new Note which  provides  for payment of the  principal on
November 1, 2000 (unless demanded at an earlier date), and bears interest at the
rate of 9% per annum, payable monthly beginning February 1, 1999. At the time of
issuance of the new Note, the Corporation released its mortgage lien on the Real
Property in order to permit W Realty,  which now includes an unaffiliated  third
partner,  to lease the Real  Property to another  third  party.  In place of the
mortgage lien, the new Note is secured by the partnership  interests of W Realty
owned by Messrs.  Wilk and  Rekuc.  The  credit of rental  payments  is still in
effect.

                                        4

<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------




Results of Operations

Revenues for the three months ended March 31, 1999 were  $10,386,479 as compared
with  $17,564,437  for the quarter  ended March 31, 1998.  For the quarter ended
March 31, 1999 the Corporation  reported net income of $288,070 as compared with
net income of $82,002 for the similar period in the prior fiscal year. Operating
income  totaled  $347,080  in the 1999  quarter as  compared  to $151,817 in the
similar  period  in fiscal  1998.  For the nine  months  ended  March 31,  1999,
revenues were $34,281,057,  as compared to $57,360,566  reported for the similar
period in the prior  fiscal  year,  with net income of  $888,182  for the period
ended March 31, 1999,  compared  with net income of $871,560 for the same period
in the prior  fiscal year.  Operating  income in the nine months ended March 31,
1999 was  $1,080,833  compared to $669,889 in the similar period in fiscal 1998.
The net income for the  periods in the prior  fiscal  year was  affected  by the
non-recurring  gain  from  the  sale  of  certain  real  property  owned  by the
Corporation. The decrease in revenues is primarily due to the loss in March 1998
of the hardware sales contract with the  Corporation's  major  customer,  and is
also a result of  management's  shift in focus from low profit  margin  hardware
sales to sales of higher profit margin technical and training services. The loss
of the contract  has not had any negative  impact to date on services or service
related revenues and has reduced the  Corporation's  hardware-related  expenses.
Revenues  attributable to service,  support and training operations increased by
approximately  80% compared to the same periods in the prior year. This increase
offset the effect of the decrease in revenues from hardware sales.

Earnings  for the  quarter  and  nine-month  period  ended  March  31,  1999 are
attributable  to the  significant  increase  in service,  support  and  training
operations,  and  management's  concentration  on sales of  network  and  system
integration  products  which yield higher profit  margins,  as well as continued
adherence to and  implementation of cost control measures.  Service and training
related  revenues are  significant in their  contributions  to earnings  because
these  operations yield a higher profit margin than equipment sales. In addition
to the technical  service sales referenced above, for the quarter and nine-month
period ended March 31,  1999,  the  increase in revenues  from the  provision of
service,  support,  outsourcing and network integration is largely the result of
the Corporation renewing and/or entering into service contracts with a number of
large  corporate  customers.  Most of these  contracts are  short-term,  usually
twelve months or less, and contain  provisions  which permit early  termination.
Although the contracts  generally  contain renewal terms,  there is no assurance
that such renewals will occur.

The  computer  industry  continually  faces  a trend  of  decreasing  prices  of
computers  and  related  equipment.  Management  believes  that this  trend will
continue.  Industrywide,  the  result of price  erosion  has been  lower  profit
margins on hardware sales,  which require businesses to sell a greater volume of
equipment to maintain past earning levels. Another result of the price decreases
has  been   intensified   competition   within  the   industry,   including  the
consolidation of businesses through merger or acquisition, manufacturers selling
directly to the end-user,  and the entrance of manufacturers  into the technical
services  business.  Management  believes  that the adoption of policies by many
larger corporate  customers to limit the number of vendors  permitted to provide
goods and services for  specified  periods of time has further  increased  price
competition.   To  meet  these  competitive   challenges  and  to  maximize  the
Corporation's profit margin,  management has modified its marketing strategy and
has  enforced  expense  controls.  Management's  current  marketing  strategy is
designed  to  increase  sales of lower  revenue/higher  profit  margin  products
related to service,  technical  support and  training  operations.  Management's
efforts include  targeting  commercial,  educational and governmental  customers
which  provide  marketplaces  for a wide range of products  and  services at one
time,  a  cost-effective  approach to sales.  Management  believes it  maximizes
profits through concentration on sales of value-added applications; promotion of
the Corporation's service and support operations;  and adherence to cost-cutting
controls.  In  light of the  above,  management  emphasizes  and  continues  the
aggressive  pursuit of an  increased  volume of  technical  service  and support
programs and promotion of its training services.

                                        5

<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------




Results of Operations (Continued)

Selling,  general and administrative  expenses increased to approximately 16% of
revenue  for both the  quarter  and nine  months  ended  March  31,  1999 due to
increased salary and personnel related expenses  resulting from the expansion of
the Corporation's technical staff as well as the decrease in revenues.  Selling,
general and  administrative  expenses were  approximately 9% of revenues for the
same periods in fiscal 1998.

Interest income  increased in the quarter and nine-month  period ended March 31,
1999, as compared to similar periods in the prior fiscal year primarily due to a
stronger cash position,  which allowed the  Corporation to invest larger amounts
than in prior years.

Liquidity and Capital Resources

There are no material commitments of the Corporation's capital resources.

The  Corporation  currently  finances a portion of its accounts  receivable  and
finances   purchases  of  portions  of  its  inventory  through   floor-planning
arrangements  under  which  such  inventory  secures  the  amount   outstanding.
Inventory  decreased in the quarter and nine-month  periods ended March 31, 1999
as compared to the corresponding periods in the prior fiscal year in response to
the lower level of hardware sales.

Accounts receivable  decreased for the quarter and nine-month period ended March
31, 1999 as compared  to the same  periods in the prior  fiscal year as a direct
result of the decrease in revenues.  Accounts payable  decreased for the quarter
and nine-month period ended March 31, 1999 compared with the same periods in the
prior  fiscal  year  as  a  result  of  the  reduced  inventories,  as  well  as
management's  efforts to shorten  payable  cycles and  thereby  avoid floor plan
financing costs. Cash levels increased in the three and nine month periods ended
March 31, 1999 as compared  to the  corresponding  periods in fiscal 1998 due to
increased sales of higher profit margin services.

For the fiscal  quarter and nine months ended March 31, 1999,  as in the similar
periods in the prior  year,  the  internal  resources  of the  Corporation  were
sufficient to enable the Corporation to meet its obligations.

In the first quarter of fiscal 1998,  management  was appraised of an unasserted
possible claim or assessment involving the Corporation's  Pension Plan. The Plan
was adopted in 1981 as a defined  benefit  plan. In 1989,  various  actions were
taken by the  Corporation  to  terminate  the Plan,  to  convert it to a defined
contribution plan and to freeze benefit accruals. No filing for plan termination
was  made  with  the  Pension  Benefit   Guaranty   Corporation   (the  "PBGC").
Additionally,  a final  amended and restated  plan  document  incorporating  the
foregoing  amendments and other required amendments  including those required by
the Tax  Reform  Act of 1986 do not  appear to have been  properly  adopted.  In
addition, since 1989, it appears that certain operational violations occurred in
the  administration  of the Plan including the failure to obtain spousal consent
in certain instances where it was required.

The  Corporation  has  determined  to (i) take  corrective  action under the IRS
Walk-in  Closing  Agreement   Program  ("CAP"),   (ii)  apply  for  a  favorable
determination  letter with respect to the Plan from the IRS, and (iii) terminate
the Plan.  The CAP program  provides a correction  mechanism for  "non-amenders"
such as the Corporation. In March 1999 the Corporation submitted the appropriate
Plan documents and related data to the IRS and PBGC. These matters are presently
under  consideration  by these  agencies.  Under CAP,  the  Corporation  will be
subject to a monetary  sanction (which could range from $1,000 to  approximately
$40,000).   In  addition,   the   Corporation   will  be  required  to  correct,
retroactively, operational violations, and to pay any resulting excise taxes and
PBGC premiums and  penalties  that may be due.  Special  counsel has advised the
Corporation  that  although it  believes  that the  Corporation  will incur some
liability in connection with the correction of such operational  violations,  it
is not possible to estimate the potential amount of or the range of liability at
this time.

                                       6

<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Year 2000

Many existing computer systems,  including certain of the Corporation's internal
systems,  use only the last two digits to identify years in the date field. As a
result, these computer systems do not properly recognize a year that begins with
"20" instead of the familiar "19," or may not function properly with years later
than 1999. If not  corrected,  many computer  applications  could fail or create
erroneous  results.  This is  generally  referred to as the "Year 2000" or "Y2K"
issue.  Computer  systems that are able to deal  correctly with dates after 1999
are referred to as "Year 2000 compliant."

With respect to the  Corporation's  internal  systems and  operations,  its main
internal computer system,  which processes  information to prepare  inventories,
purchase orders,  invoices and accounting  functions is Y2K compliant.  To date,
the  Corporation  has spent  approximately  $20,000  to bring its  systems  into
compliance,  and is currently preparing a program to determine whether to update
or replace  other  internal  computer  systems to ensure  compliance.  The costs
involved in such an update and/or replacement have not yet been estimated. As of
the filing of this report,  the Corporation has not prepared a contingency  plan
and will assess the need for such a plan when  sufficient  information  has been
provided by third parties with whom the Corporation has a material relationship.
The Corporation  learned from the product vendors and suppliers with whom it has
a  material  relationship  that  they  are Y2K  compliant.  The  Corporation  is
currently in the process of ascertaining whether its internal systems other than
its computer  systems,  and other  suppliers as well as major  customers are Y2K
compliant.  Because  of the  uncertainties  involved,  pending  receipt  of this
information, it is not possible to estimate the effect upon the Corporation, for
example,  the amount of lost revenues,  if its material  vendors,  suppliers and
customers were not Y2K compliant.

The  matters  discussed  in  Management's   Discussion  and  Analysis  that  are
forward-looking  statements are based on current  management  expectations  that
involve  risk and  uncertainties.  Potential  risks and  uncertainties  include,
without  limitation:  the impact of  economic  conditions  generally  and in the
industry for  microcomputer  products and  services;  dependence on key vendors;
continued  competitive  and pricing  pressures in the industry;  product  supply
shortages;  open-sourcing of products of vendors;  rapid product improvement and
technological  change,  short  product  life cycles and  resulting  obsolescence
risks; technological developments; capital and financing availability; and other
risks set forth herein.

                                        7

<PAGE>



                           PART II - OTHER INFORMATION



Item 4.  Submission of Matters to a Vote of Security Holders

        The  Corporation's  Annual Meeting of Stockholders was held on March 26,
1999.

        At the meeting,  the  following  seven  individuals  were elected by the
following vote to serve as directors of the Corporation, each to serve until the
next annual meeting of stockholders  and until his successor is duly elected and
qualifies.

             Name                         Shares Voted

                                        For      Authority Withheld

        John J. Wilk                 4,112,471         72,602
        Steven J. Wilk               4,112,566         72,507
        Jay A. Smolyn                4,137,466         47,607
        Vincent Cusumano             4,129,596         55,477
        Earle Kunzig                 4,135,646         49,427
        Raymond J. Rekuc             4,133,066         52,007
        Susan M. Wilk-Cort           4,115,316         69,757

Item 6.  Exhibits and Reports on Form 8-K

        A. Exhibits - None required to be filed for Part II of this report.

        B.   Reports on Form 8-K - None filed during the quarter for which this
             report is submitted.

                                        8

<PAGE>


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                 TRANSNET CORPORATION
                                  (Registrant)


                                 /s/ Steven J. Wilk
                                 ------------------
                                 Steven J. Wilk, President



                                 /s/ John J. Wilk
                                 ----------------
                                 John J. Wilk,
                                 Principal Financial and Accounting
                                 Officer and Chairman of the Board of Directors




DATE:  May 12, 1999


                                       9